The proposed move, according to the report, would have seen Robert Green switch to Palace.
“Green is entitled to a two-year extension beyond his deal ending this summer, if he plays a certain number of league games this season, thought to be 30,” states the report in The Times.
McCarthy joined Palace from QPR in the summer of 2015, but he has struggled for playing time this campaign.
It is unlikely that McCarthy will be able to get much playing time at Palace during the rest of the season. Perhaps it would have been a good move for the Englishman had he returned to QPR on a temporary deal.